Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities
The benchmark Nifty index witnessed a brutal selloff on Tuesday, tumbling 1.38%, marking its steepest single day decline since April 7, 2025. The sharp fall dragged the index to its lowest closing level since October 15, 2025, as relentless selling pressure dominated throughout the session. On the daily chart, Nifty formed a large bearish candle, underscoring the intensity of the selloff.
With this slide, the index has now corrected over 4% in just 10 trading sessions, one of the fastest short term declines in recent months. Nifty is currently hovering near its 200 day EMA, a crucial long term support zone watched closely by traders and institutional investors. Meanwhile, the daily RSI has dropped to 29.27, its weakest reading since March 2025, indicating oversold conditions but also reflecting strong downward momentum.
Among the Nifty constituents, Bajaj Finance and Jio Finance emerged as the top losers, dragging the index lower. On the flip side, Tata Consumer and HDFC Bank managed to close in the green, offering limited support in an otherwise weak market. All sectoral indices ended in deep red, with Nifty Realty, Nifty Auto, and Nifty Chemical suffering the sharpest cuts, highlighting the broad based nature of the decline.
The pain was even more severe in the broader markets. The Nifty Midcap 100 plunged 2.62%, while the Nifty Smallcap 100 tumbled 2.85%, extending their underperformance. Most notably, the Midcap index closed below its 200 day EMA for the first time since August 2025, signalling a potential shift in medium term trend. The Smallcap index delivered its lowest close since May 2025 and is now trading nearly 6% below its 200 day EMA, reflecting significant stress in high beta pockets of the market.
Market breadth remained extremely weak as the advance decline ratio skewed heavily in favour of losers. Within the Nifty 500 index, a staggering 460 stocks ended in negative territory, capturing the depth of the selloff across sectors and segments.
Nifty View
Going ahead, the 25370–25400 zone will act as the immediate resistance for Nifty. This band has now become a critical supply zone, and as long as the index continues to trade below 25400, the broader sentiment is likely to remain weak.
Failure to reclaim this level may keep the index on its downward trajectory, with the next support placed at 25080. A breakdown below this support could extend the fall towards 24900 in the short term, where the next demand zone is likely to emerge.
Overall, the trend remains bearish, and the index will need a decisive move above 25400 to signal any meaningful pause or reversal in the ongoing corrective phase.
Bank Nifty View
The banking benchmark index, Bank Nifty, also came under pressure on Tuesday, extending the weakness seen across the broader market. The index slipped below its 20 day EMA, signalling a loss of short-term momentum after showing resilience in the previous sessions. The price action has turned subdued, and key momentum indicators, along with oscillators, are now pointing towards a sideways to mildly corrective phase, suggesting lack of clear directional conviction.
Looking ahead, the immediate support for the index is placed in the 59000–58900 zone. A breach below this band could trigger further downside volatility and expose the index to deeper corrective moves. On the upside, the index faces a stiff resistance cluster at 59900–60000, which is expected to act as a crucial hurdle.